The New Culture of Smart Manufacturing

Oct. 9, 2018
Technologies aren’t really the sticking point for digital transformation—it’s change. Which comes first? Process or culture?

What is eating manufacturing executives right now? Is it the availability of new smart technologies and how to implement them? Nope, it’s the usual culprit—change management.

There’s been an ongoing discussion about changing from a process-first organization to a culture-first organization in the digital transformation journey. In the manufacturing industry, it is drilled into us to follow process; if the process is perfect, the product will be perfect every time. So how does manufacturing move from this mindset to one that puts culture first? The more relevant question: Is such a change beneficial?

Let’s look at one aspect of digitalization: the Internet of Things (IoT). When our machines are connected, we can distribute real-time data to consumers of that data anywhere in the world. This is where we are potentially going down the rabbit hole. Many large IT companies are peddling services to provide real-time manufacturing data to mobile users. It’s exciting, but is it useful? A CEO visiting Japan can see production is down in Turkey. What is she going to do? Probably call the local plant manager to find out why. It’s pointless and has no positive impact. Both the CEO and the plant manager are wasting their time.

Perhaps a more valuable approach is to figure out how to use the data for decision-making or how to gather Big Data and use it to identify root causes of production losses. This is where a culture of brain storming, idea exchange and discussion come in. We need to think first and then act. I see too many failed and irrelevant projects caused by a simple lack of following an agreed transformation process. There we go again… Which comes first? Culture or process?

There is little doubt that the digitalization tools are available. Many companies are releasing funds to invest in digitalization, but who is thinking through how best to deploy? Today, we see an increase of IT people suggesting solutions such as doing condition monitoring in the cloud. Our operations technology (OT) teams sigh and let them know that we already do that close to the equipment for very fast reaction times.

I would like to see a different approach—no sighing, embrace the IT interest, engage OT with IT, and work on budget creation for exciting technology projects with business benefits. Let’s face it: It’s usually manufacturing engineers and managers who follow a process to implement solutions. Perhaps we are already using the right solution to change. Lean/Six is already a culture—it’s a culture of learning and continuous improvement. At the same time, it’s a process expressed over and over again in the classic lean and Six Sigma step-by-step programs. Introduce IT and other departments to lean and Six Sigma, and we might have a way of merging process first or culture first into a single, structured approach that includes stimulating inventiveness.

It would therefore seem that close to the shop floor there is already a culture-first attitude. In the manufacturing industry, we have really drilled people to think and engage. Now we need to mix this with the new opportunities offered by smart digital transformation without forgetting that process is critical to great deployments. Executives should trust their teams to use this combination of culture and process. By the way, executives should also motivate teams by asking for applications that will actually help the business improve the business rather than make them feel as if they are in control.

Change is never easy. Change was the No. 1 topic at the Industry of Things World conference in Berlin this fall. Executives were saying, “These are great technologies, but how can we get our people to use them?”

My simple answer: Get executives in a room with engineers and they will feel the power of smart digital transformation.

>>Mike James has held several roles at MESA International, including chair of MESA’s Global Education Program from 2009 to 2012 and chair of MESA EMEA from 2010 to 2013. After serving as president of the Manufacturing Operations Management Institute to continue developing MOM education with MESA, James was appointed chair of MESA. He is now ex-chair and an executive committee member. He is also chair of the board of directors for ATS Global.

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